A Little Firmer To Start, Local Data & China PMIs Eyed

Much the same as U.S. Tsys, Aussie bond futures recovered from lows in overnight dealing leaving YM +2.5 and XM +0.5, a touch above to in line with late overnight levels. Bills sit unch. to 2bp richer through the reds.

• Local news flow remains light/insignificant for markets, which will leave wider macro matters and local data flow at the fore on Wednesday.
• The domestic docket is headlined by Q2 completed construction work (a GDP partial) and private sector credit data. We will also see A$1.0bn of ACGB Nov-32 supply.
• Further afield, official Chinese PMI data is due, with another contractionary m’fing reading expected (BBG median 49.2 vs, prior 49.0), while the rate of expansion seen in the non-m’fing PMI is expected to slow (BBG median 52.3 vs. prev. 53.8).
• The more meaningful matter for markets is next week’s RBA decision, with markets tilted firmly towards a 50bp hike (44bp priced at typing) the RBA’s language surrounding the recent upside surprise in retail sales will be eyed (Although there may be no meaningful tweaks there), with RBA Governor Lowe’s subsequent Anika foundation address (Thursday 8 September) giving more space for thoughts on the economic situation and outlook for monetary policy
• Note that month-end extensions for the space (using the BBG AusBond indices) are below the medium-term averages, across the board.

Source: MNI - Market News/Bloomberg

* Average, Median, Low & High Data Is based off of data stretching back to Sep '19